Today's the day when market participants, investors, analysts, corporate giants, and members of the public will finally find out whether the US Federal Open Market Committee (FOMC) will commit to an official statement on the much-anticipated reduction of interest rates which are mooted to take place during the course of 2024.
As speculation continues whilst the second day of the FOMC meeting rolls on, the markets are showing signs of indicating where the confidence lies.
This week, there is one particular commodity that has made its way into the limelight: spot gold.
Gold has been recognised universally as a store of value throughout the ages, and in this period of optimism after businesses and individuals alike being encumbered with high costs of monthly commitments due to high interest rates, spot gold (XAUUSD) is performing well.
There are some schools of thought that consider spot gold to be an instrument to watch, with a recent Reuters poll having concluded that gold may rise during the course of 2024 should the anticipated rate cuts be made official - something we will all know at 21:00 GMT+2 today when the FOMC meeting concludes and a concluding statement containing the important highlights will be issued.
According to the FXOpen chart, XAUUSD completed the trading day yesterday at $2,039.59 for 1 Troy ounce of gold.
This is an interesting figure, largely because there has been some degree of volatility around the price of spot gold during the course of this week, with many reports having highlighted a fall from a two-week high, mainly because despite the positive sentiment relating to the aforementioned imminent Fed announcement, data relating to job vacancies in the United States had been released which in which there were more unfilled positions than had been predicted in December last year.
Gold may be relatively buoyant when taking a longer-term view of historical data. However, today's value is a far cry from the spike that was experienced on December 4 last year when XAUUSD reached $2,115.64 before returning the next day to a similar value to that of today, minus a few points.
Overall, the market price of spot gold is a relatively reliable indicator of the overall commercial, national, and individual view on the confidence in a specific national economy, and currently, all focus is on that of the United States, which appears to be strong and is looking toward no less than three possible interest rate reductions during this year.
Let's see how the US dollar responds at the conclusion of the Fed meeting later today and how store-of-value commodities such as gold are traded if new-found optimism arises.
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